By Ashemiriogwa Emmanuel
In the past week, the Nigerian foreign exchange (FX) reserves expanded by $1.3 billion or 3.4 per cent from $39.6 billion on Thursday, October 14 to $40.9 billion on October 21, 2021.
Observing the data obtained from the Central Bank of Nigeria (CBN) by Business Post, this is the first time in over two years that Nigeria’s FX reserves will get to such a high level.
This, however, is coming as little or no surprise given that the country’s foreign savings account has in August 2021 been projected to cross the $40 billion mark in a matter of weeks following the $3.35 billion Special Drawing Rights (SDRs) direct allocation approved by the International Monetary Fund (IMF) to Nigeria.
While it has not been confirmed yet that this fund has been credited to the nation, the recent accretion to the nation external buffers is likely from the sale of crude oil. The price has recently witnessed a significant increase compared with what was obtained last year when prices went down below $20 per barrel in contrast to the over $80 per barrel it currently sells.
Crude oil accounts for over 80 per cent of Nigeria’s total exports revenue and the latest update from the Organisation of the Petroleum Exporting Countries (OPEC) Oil Market Report revealed that Nigeria’s average crude oil production was 1.451 million barrels per day in September.
This represented a 12.0 per cent or 156 million barrels per day increment when compared with the preceding month, where it averagely produced around 1.296 million barrels per day.
The steady rise in the FX reserves means the apex bank will have enough forex to defend the Naira at the currency exchange market. Supply is also expected to be boosted with the $4 billion Eurobond sale by the Debt Engagement Office (DMO) last month.
Business Post reported in September that the sales of the debt instrument to offshore investors would serve as a major boost to the nation’s reserves.
The debt office also hinted recently that it plans to return to the Eurobond market to borrow fresh $2.1 billion for the balance of its $6.1 billion borrowing from foreign investors.
Observing the movement in the external reserves during the week, it went from $39.6 billion on Thursday, October 14 to $39.8 billion the following day, gaining about $199.2 million.
On the first working day of the following week, the amount then expanded by $566.4 million to $40.4 billion, after which it further rose to $40.8 billion on Wednesday, October 20, before settling at $40.9 billion at the close of the next day.
Dipo Olowookere 
Adedapo Adesanya